Wage Dispersion and Search Behavior: The Importance of Nonwage Job Values

Robert E. Hall and Andreas Mueller

Journal of Political Economy, 2018, vol. 126, issue 4, 1594 - 1637

Abstract: We use a rich new body of data on the experiences of unemployed job seekers to determine the sources of wage dispersion and to create a search model consistent with the acceptance decisions the job seekers made. We identify the distributions of four key variables: offered wages, offered nonwage job values, job seekers' nonwork alternatives, and job seekers' personal productivities. We find that, conditional on personal productivity, the standard deviation of offered log wages is moderate, at 0.24, whereas the dispersion of the offered nonwage component is substantially larger, at 0.34. The resulting dispersion of offered job values is 0.38.

Date: 2018
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Working Paper: Wage Dispersion and Search Behavior: The Importance of Non-Wage Job Values (2015)
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